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Consulting Case Interviews
Cracking the case
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2004 Mini-Course
2nd Year Ace the Case
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• Situation
• Interview Framework
• Wrap-up
Agenda
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Situation
Great year for management consulting
Interviews are in
4 weeks
Preparation is critical
Try to get in 15-25 cases
What is a good day to begin mock
interviews?
Finally, time to get in the frame of mind
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Focus on the Interview
Review frameworks (this week)
Vault and Wet Feet – Free access
Harvard Case Book – On P Drive in
Consulting Folder
Get into Mindset
Framework around Interviewing
Stick to game plan
Attend Sessions and Network
2nd Years, Alum, Company Presentations
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What is a Case?
30 to 45 minutes
One-on-One
First Rounds – Usually 2nd or 3rd year
Consultant, your future manager
Second Rounds – Usually 4+ years, Partners
A problem or situation that they are looking for
your help on, your analysis
Usually projects that they once worked on
The goal is concrete diagnosis and pragmatic
solutions
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A problem, situation, or challenge is described to you and you are expected to:
Crack the Case - Identify the main issues by asking questions in an iterative process with the interviewer
By using your framework(s) to:
state and test hypotheses
structure the interaction
modify direction/framework when necessary
synthesize, propose solutions and recommend courses of action
What is a case interview
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What Firms Look For: Part IIOther Dimensions
Does the candidate:
• Possess strong interpersonal skills?
• Communicate effectively?
• Display energy/drive?
• Show initiative?
• Demonstrate flexibility?
• Possess a strong desire to succeed
• Perform well under pressure?
• Manage time effectively?
• Convey genuine interest in the career and the firm?
What Firms Look For: Part IProblem Solving Skills
Does the candidate:
Follow a structured thought process?
Demonstrate insight on the key business
issues?
Apply solid quantitative skills?
Display creativity?
Demonstrate decisiveness?
Evaluation Framework
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Analytical Thinking (AT)
Quantitative Thinking (QT)
Conceptual Thinking (CT)
Personal Impact (PI)
Evaluation Criteria for Case Interviews
The ability to use
casual
relationships in
deductive problem
solving
Developing an
issue tree to solve
a complex problem
Breaking a
complex problem
into the key
components in a
structured manner
Definition
Examples
The ability to think
analytically in a
quantitative context
Developing a
quantitative structure
Conducting numerical
analyses ( what would
you have to believe
same-store sales
growth to be for market
share to double in 5
years?)
The ability to see
patterns, infer
relationships, and build
conceptual frameworks
in inductive problem
solving
Forming hypotheses
from multiple data
points
Framing a problem in
an insightful way
Showing good
judgment / intuition
Insightful synthesis
(not just summarizing!)
Creative idea
generation
Professionalism
Presences in the
room; energetic
and interested in
the issues; not a
flat liner. . .
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• Summarize results, Push Implications
Summarize Findings
Conceptual Thinking (CT)
* “Decompose Problem” step may be unnecessary for “brain teaser” cases** Time estimation based on 30 minute interview
Major Interviewee Activity
Relative Amount of Information Sharing
Time** 5 minutes 15 minutes5 minutes 5 minutes
Interviewee
Interviewer
• Listen / Write / Ask Questions – Dig a little deeper
Listen / Clarify
Problem
• Apply framework to test solution
Test Hypothesis
Interview Framework
• Break problem into logical parts
Decompose Problem
Analytical Thinking (AT)
• Propose solutions, Ideas
Hypothesize
Quantitative Thinking (QT)
Resume Review
• Solidify Structured Thought
Personal Impact (PI)
Small Talk
• Establish Professionalism
Personal Impact (PI)
Evaluating
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Interview – Small Talk
What to Focus On
Establish Professionalism
He/She is the client
Establish Rapport
Do you know someone at the firm?
Talk about how excited you are to interview
Say “It is a pleasure to meet you” with
massive sincerity
Get Down to Business / Don’t Prolong getting to
the Case
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• Summarize results, Push Implications
Summarize Findings
Conceptual Thinking (CT)
* “Decompose Problem” step may be unnecessary for “brain teaser” cases** Time estimation based on 30 minute interview
Major Interviewee Activity
Relative Amount of Information Sharing
Time** 5 minutes 15 minutes5 minutes 5 minutes
Interviewee
Interviewer
• Listen / Write / Ask Questions
Listen / Clarify
Problem
• Apply framework to test solution
Test Hypothesis
Interview Framework
• Break problem into logical parts
Decompose Problem
Analytical Thinking (AT)
• Propose solutions, Ideas
Hypothesize
Quantitative Thinking (QT)
Resume Review
• Solidify Structured Thought
Personal Impact (PI)
Small Talk
• Establish Professionalism
Personal Impact (PI)
Evaluating
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Interview – Listen / Clarify Problem
Questions What is the business case for the US to have a
manned mission to Mars?
My client is a company that makes high tech vacuum
toilets for military ships. They are thinking of taking the
technology and going into new markets. What do you
think?
What new markets? I would think this would be an
expensive toilet with all of the technology.
A restaurant company is declining in profitability, what
is wrong and what can we do about it?
What kind of restaurants – multiple brands? Which
segments?
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Steam Boiler Hose ManufacturerStructuring Problems
McKinsey was asked by a diversified manufacturing client to help turn around the steam boiler
hose division.
Relevant facts include:
(1) Boiler hoses are sold both with original equipment and as replacements
(2) There has been increasing price pressure in the industry
(3) Last year, P&L showed the following (as % of sales)
–Raw Material 70%
–Labor 20%
–Overhead 10%
–SG&A 15%
–Profit (15%)
(4) Client is third of eight industry participants
(5) At least two of the other companies in the industry are making moderate profits
(6) The raw material is a commodity petrochemical
How would you structure an analysis aimed at restoring profitability? Where do you expect to
be able to save costs?
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Video Game ManufacturerStructuring Problems
The CEO of a large, diversified entertainment corporation has asked a Bain team to examine
the operations of a subsidiary of his corporation that manufacturers video games.
Specifically, he needs to know if he should approve a $200 million capital request for
significantly expanding the division’s capacity
You are a member of the McKinsey team assigned to this project. Assume you and I are at the
first team meeting. What are the critical issues we should plan to examine and why?
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Interview – Listen / Clarify Problem
What to Focus On Listen / Absorb
Any emphasis on words / out right hints
What kind of firm - LEK – always M&A angle
Start Your Engine
What are you going to focus on?
Any early hypotheses? Don’t jump to early
Only Ask Questions about the Case, relative to the
Question given
Usually good to ask questions about product and
customer segments (high proportion of cases are
about segmentation)
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• Summarize results, Push Implications
Summarize Findings
Conceptual Thinking (CT)
* “Decompose Problem” step may be unnecessary for “brain teaser” cases** Time estimation based on 30 minute interview
Major Interviewee Activity
Relative Amount of Information Sharing
Time** 5 minutes 15 minutes5 minutes 5 minutes
Interviewee
Interviewer
• Listen / Write / Ask Questions
Listen / Clarify
Problem
• Apply framework to test solution
Test Hypothesis
Interview Framework
• Break problem into logical parts
Decompose Problem
Analytical Thinking (AT)
• Propose solutions, Ideas
Hypothesize
Quantitative Thinking (QT)
Resume Review
• Solidify Structured Thought
Personal Impact (PI)
Small Talk
• Establish Professionalism
Personal Impact (PI)
Evaluating
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Decompose Problem
Definition
Mutually Exclusive, Collectively Exhaustive (MECE)
Structure, not Frameworks
Structuring a complex problem into the key issues
required to solve the problem; breaking a complex
question into smaller, manageable questions
An initial problem solving structure that has
component that are unique and cover the entire
solution landscape; single element solutions (i.e., fix
cost issue) may miss part of the solution set (i.e.,
revenue opportunities)
MECE structures are critical if the interviewer needs
a second or third issue to investigate.
Frameworks are general solution sets (Porter’s 5
forces, 3 C, etc ) for generic business issues.
Frameworks are useful when very little information is
known about the client issue.
Structure is designing a MECE solution set given specific client information . . .
Analytical Thinking
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What to Focus On
Spend 2-4 minutes writing and drawing – don’t stop
and ponder too much
Ok to scribble or be illegible
Define the whole structured universe
Always thinking – Mad Scientist
Highlight important areas
Dig deeper into some areas of the tree
Decompose Problem
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IllustrationFramework Possible Applications
Potential Entrants
Competition
Substitutes
Suppliers Buyers
Support Activity 1
Support Activity 2
InboundLogistics
OperationsOutboundLogistics
Sales andMarketing
Five Forces
Value Chain
Profit Tree
• Assess industry attractiveness for possible market entry
• Understand operations cost drivers
• Assess relative value-added of each step
• Determine where profitability problems lie
3C’s & 4P’s • Quickly define the market, competition and value proposition
• Company, Customers, Competitors
• Product, Price, Place, Promotion
Profitability
Revenues
Costs
Volume
Price
Fixed
Variable
INTRO GROWTH
TIME
DECLINEMATURITY
Product Life Cycle• Understand stage of competition and
critical issues for products
Review of the key frameworks
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Profit tree
Profit
Segment Customers
Value vs. Premium
Competition
Differentiation / Features
Product Improvement
Distribution
Promotions
Industry Life Cycle
Product Development
Repositioning / Geog. Expansion
Renegotiate , Lower Transfer Price
Reduce Waste
Not Wages – Productivity
Outsource
Importance to Customer
Capacity Utilization
Benchmarking
Benchmarking
Increase MS
Market Growth
New Markets
Elasticity
PositioningPrice
Quantity
Variable
Fixed
Revenue(P x Q)
CostVC x Q + FC
Materials
Labor
Service
Machinery
Overhead
Distribution
Profitability, Competitive Situation,
Capital Projects, Acquisitions
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Profit tree
Profit
Revenue(P x Q)
CostVC x Q + FC
Price
Quantity
Variable
Fixed
Elasticity
Positioning
Increase MS
Market Growth
New Markets
Materials
Labor
Service
Machinery
Overhead
Distribution
Segment Customers
Value vs. Premium
Product Improvement
Industry Life Cycle
Product Development
Renegotiate , Lower Transfer Price
Not Wages – Productivity
Importance to Customer
Capacity Utilization
Benchmarking
Benchmarking
Competition
Differentiation / Features
Distribution
Promotions
Repositioning / Geog. Expansion
Reduce Waste
Outsource
Profit
Revenue(P x Q)
CostVC x Q + FC
Price
Quantity
Variable
Fixed
Elasticity
Positioning
Increase MS
Market Growth
New Markets
Materials
Labor
Service
Machinery
Overhead
Distribution
Segment Customers
Value vs. Premium
Product Improvement
Industry Life CycleProduct Development
Renegotiate , Lower Transfer Price
Not Wages – Productivity
Importance to Customer
Capacity Utilization
Benchmarking
Benchmarking
Competition
Differentiation / Features
DistributionPromotions
Repositioning / Geog. Expansion
Reduce Waste
Outsource
Investments
Profit
Revenue(P x Q)
CostVC x Q + FC
Price
Quantity
Variable
Fixed
Elasticity
Positioning
Increase MS
Market Growth
New Markets
Materials
Labor
Service
Machinery
Overhead
Distribution
Segment Customers
Value vs. Premium
Product Improvement
Industry Life CycleProduct Development
Renegotiate , Lower Transfer Price
Not Wages – Productivity
Importance to Customer
Capacity Utilization
Benchmarking
Benchmarking
Competition
Differentiation / Features
DistributionPromotions
Repositioning / Geog. Expansion
Reduce Waste
Outsource
Product A
Product B
Company XYZ
Segmentation
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Market entry
Market Entry
Market Attractiveness
Acquirer /Entrants’ ability
To extract value
Synergies withExisting company
Increases switchingbarriers
Marketing
Sales Channel
Operations
Product
Customers
Comp. Landscape Consolidated or fragmented?
Pricing
Growth
Profitability
Competitive Nature
Products
Stable vs. eroding pricing
Growing or shrinking
Drivers of profitability
Cooperative or competitive
Differentiated or commodity
Same set of customers
Same sales channel
Similar manufacturing, dist, etc
Complementary product
Cross selling
Strength ofMarket
Ease ofMarket Entry
Cost of Entry High barriers to entry / exit?
Market Entry Structure
Tuck at Dartmouth
• Summarize results, Push Implications
Summarize Findings
Conceptual Thinking (CT)
* “Decompose Problem” step may be unnecessary for “brain teaser” cases** Time estimation based on 30 minute interview
Major Interviewee Activity
Relative Amount of Information Sharing
Time** 5 minutes 15 minutes5 minutes 5 minutes
Interviewee
Interviewer
• Listen / Write / Ask Questions
Listen / Clarify
Problem
• Apply framework to test solution
Test Hypothesis
Interview Framework
• Break problem into logical parts
Decompose Problem
Analytical Thinking (AT)
• Propose solutions, Ideas
Hypothesize
Quantitative Thinking (QT)
Resume Review
• Solidify Structured Thought
Personal Impact (PI)
Small Talk
• Establish Professionalism
Personal Impact (PI)
Evaluating
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What to Focus On Take a few minutes to take interviewer through structure
Turn the page and start talking and pointing Start at the beginning of the tree restating the question
State hypotheses Whether right or wrong, you will get reactions from the interviewer which will further drive your analysis
Emphasize Case facts Potential areas of further exploration Bring in any knowledge you have on the industry
Take notes (New pages) Circle areas to explore Write down new case facts
Hypothesize
Tuck at Dartmouth
• Summarize results, Push Implications
Summarize Findings
Conceptual Thinking (CT)
* “Decompose Problem” step may be unnecessary for “brain teaser” cases** Time estimation based on 30 minute interview
Major Interviewee Activity
Relative Amount of Information Sharing
Time** 5 minutes 15 minutes5 minutes 5 minutes
Interviewee
Interviewer
• Listen / Write / Ask Questions
Listen / Clarify
Problem
• Apply framework to test solution
Test Hypothesis
Interview Framework
• Break problem into logical parts
Decompose Problem
Analytical Thinking (AT)
• Propose solutions, Ideas
Hypothesize
Quantitative Thinking (QT)
Resume Review
• Solidify Structured Thought
Personal Impact (PI)
Small Talk
• Establish Professionalism
Personal Impact (PI)
Evaluating
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What to Focus On
Once your done with the structure repeat what the interviewer wants you to focus on – prioritize future analysis
Time to find the needle or needles in the haystack!!! Rich discussion building up on where to focus and new case facts Keep on writing everything down!!! Introduce new frameworks and hypotheses Always thinking, Always Implications
Usually the time where you get the Quantitative Tests If you are not comfortable doing public math, just do a lot on paper If you know the approximate answer say it is around 420 and then do the math Any mock interviews through some public math in
Test Hypothesize
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Definition
Math Skills
Sample Calculations
Quantitative Thinking (QT)
Simple math skills (e.g., addition , subtraction,
multiplication, division) are required
Manipulate fractions and percentages
Estimations
- - Breakeven calculation for a new product
- - Maximum capacity calculation for a manufacturing
facility
- - Market size after 2 years of steady 10% growth
- - Profitability of adding one additional customer
- - Other
Ability to move efficiently and effectively through mathematical
problems to get to the key analyses
Ability to show facility with handling calculations with ease in a
interview (public math)
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• Summarize results, Push Implications
Summarize Findings
Conceptual Thinking (CT)
* “Decompose Problem” step may be unnecessary for “brain teaser” cases** Time estimation based on 30 minute interview
Major Interviewee Activity
Relative Amount of Information Sharing
Time** 5 minutes 15 minutes5 minutes 5 minutes
Interviewee
Interviewer
• Listen / Write / Ask Questions
Listen / Clarify
Problem
• Apply framework to test solution
Test Hypothesis
Interview Framework
• Break problem into logical parts
Decompose Problem
Analytical Thinking (AT)
• Propose solutions, Ideas
Hypothesize
Quantitative Thinking (QT)
Resume Review
• Solidify Structured Thought
Personal Impact (PI)
Small Talk
• Establish Professionalism
Personal Impact (PI)
Evaluating
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Summarize
Definition
Hypotheses,
Insights
Synthesis
Conceptual Thinking (CT) Ability to take several pieces of information and draw an
inference or a synthesis from that information
Ability to think outside of the box and come up with insightful
ideas and interesting hypotheses
“From the information provided, this company may want to
dedicate more resources to its new products rather than
continuing to sink funds into outdated ones.”
“In addition to the ideas we have already covered, the CEO may
want to consider alternative uses for this sudden uptick in
profitability. I think some important areas for growth could
be…”“In summary, this company is heading for some difficult times
due to the changing market dynamics and customer
preferences. They need to make some radical changes to stay
relevant. Some changes they could make are . . . “
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What to Focus On
Manage Clock (watch in front of you) If 5 minutes left, stop, acknowledge not much time left and desire to synthesize Structure your synthesis
Hypotheses you made Analysis and frameworks you used Refined Hypotheses Any Conclusions
Then PUSH IMPLICATIONS Right timing Feasible recommendations Other considerations
Summarize
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• Summarize results, Push Implications
Summarize Findings
Conceptual Thinking (CT)
* “Decompose Problem” step may be unnecessary for “brain teaser” cases** Time estimation based on 30 minute interview
Major Interviewee Activity
Relative Amount of Information Sharing
Time** 5 minutes 15 minutes5 minutes 5 minutes
Interviewee
Interviewer
• Listen / Write / Ask Questions
Listen / Clarify
Problem
• Apply framework to test solution
Test Hypothesis
Interview Framework
• Break problem into logical parts
Decompose Problem
Analytical Thinking (AT)
• Propose solutions, Ideas
Hypothesize
Quantitative Thinking (QT)
Resume Review
• Solidify Structured Thought
Personal Impact (PI)
Small Talk
• Establish Professionalism
Personal Impact (PI)
Evaluating
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Resume Review
Situation. Our client was an industry laggard and an aggressive/activist investor purchased a large stake
Task. Our firm was hired to complete an EVA analysis. My role was…
Analysis/Actions. I completed all the EVA analysis for 20 plants and conducted a customer satisfaction survey. During the course of my analysis I found…
Recommendations. Based on those findings, I made the following recommendations…
Results. Sales increased by xx%, profits doubled, the stock price tripled…
STARR
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What Firms Look For: Part IIOther Dimensions
Does the candidate:
• Possess strong interpersonal skills?
• Communicate effectively?
• Display energy/drive?
• Show initiative?
• Demonstrate flexibility?
• Possess a strong desire to succeed
• Perform well under pressure?
• Manage time effectively?
• Convey genuine interest in the career and the firm?
What Firms Look For: Part IProblem Solving Skills
Does the candidate:
Follow a structured thought process?
Demonstrate insight on the key business
issues?
Apply solid quantitative skills?
Display creativity?
Demonstrate decisiveness?
Evaluation Framework
Tuck at Dartmouth
Analytical Thinking (AT)
Quantitative Thinking (QT)
Conceptual Thinking (CT)
Personal Impact (PI)
Evaluation Criteria for Case Interviews
The ability to use
casual
relationships in
deductive problem
solving
Developing an
issue tree to solve
a complex problem
Breaking a
complex problem
into the key
components in a
structured manner
Definition
Examples
The ability to think
analytically in a
quantitative context
Developing a
quantitative structure
Conducting numerical
analyses ( what would
you have to believe
same-store sales
growth to be for market
share to double in 5
years?)
The ability to see
patterns, infer
relationships, and build
conceptual frameworks
in inductive problem
solving
Forming hypotheses
from multiple data
points
Framing a problem in
an insightful way
Showing good
judgment / intuition
Insightful synthesis
(not just summarizing!)
Creative idea
generation
Professionalism
Presences in the
room; energetic
and interested in
the issues; not a
flat liner. . .
Tuck at Dartmouth
1) Quantitative ability
2) Conceptual thinking
3) Analytical ability
Three specific measures of a case interview
Bar
AnalyticalConceptualQuant
Standard level of performance and a “spike” will move you on to the next
round or get you the offer
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1. Layout a road map for your interviewer
2. Ask clarifying questions if necessary
3. Listen carefully
4. Justify all assumptions you make
5. Maintain eye contact
Top Interview Tips
6.Take your time
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7. Take notes
8. Think out loud - (transparent process)
9. Think in a clear, logical manner
10. Make your conclusion more than a summary
11. Be MECE (mutually exclusive and collectively exhaustive in your analysis)
Top Interview Tips (cont)
12. Have fun!!!
12. Save the firm specific cases for a day or two before the interview